USAID and the Evolution of Development Aid

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Rajiv Shah, the administrator of the U.S. Agency for International Development (USAID), delivered this year’s John B. Hurford Memorial Lecture on Wednesday at the Council on Foreign Relations. The topic was USAID’s efforts to reshape American foreign assistance amid a tough fiscal climate in Washington and a shifting global development landscape. You can view the video here or find it on YouTube.

In his remarks, Shah emphasized various elements of the agency’s institutional reforms. These include overhauling evaluation procedures to gauge the effectiveness of investments and forging partnerships with other governments, researchers, entrepreneurs, and firms to advance development innovations. Shah also underlined what he considers three opportunities for far-reaching development gains: bolstering resilience to disasters instead of just responding to them, boosting food security through such programs as the administration’s Feed the Future, and focusing on preventable child death to bring down birthrates and help countries reap a demographic dividend. Although Shah didn’t mention family planning in his remarks, he well knows that increasing access to voluntary family planning must accompany declines in child mortality if the demographic dividend is to be realized.

The speech was a heartening recognition that no single agency has all the answers to development challenges. As Shah noted, innovative advances in agriculture, health, governance, and more are constantly emerging from a range of public, private, and non-profit sources. The best role for organizations such as USAID today is often focused as much on convening—bringing together diverse actors to leverage resources and advance smart solutions—as on direct implementation, something I argued in a piece last year for Devex. USAID’s embrace of partnerships, along with a strengthened focus on evaluating results, is a positive sign.

However, over the last decade USAID has sunk tremendous energy and funds into three countries—Pakistan, Iraq, and Afghanistan—where the returns have been limited, at best. In Pakistan the agency appears to have spent over $6.0 billion from fiscal year 2002 to fiscal year 2011 (see the agency’s website and the Greenbook). In Iraq it has spent $7.7 billion since the war began in March 2003. Especially egregious is the U.S. embassy in Baghdad, a $750-million monstrosity that now appears likely to hold far fewer American officials than intended (though the State Department has disputed the reported scale of planned reductions). This is not USAID’s fault, but it richly illustrates America’s “grandiose and unrealistic ambitions in that country,” as Sen. Patrick Leahy said in a recent Congressional hearing. Development efforts have suffered not only from the poor security environment in these countries but also from the view that foreign assistance is tied to America’s military ambitions. This has proved particularly poisonous in Pakistan. Meanwhile, Afghanistan has been an even bigger focus for USAID, which spent some $15.2 billion there from fiscal year 2002 to fiscal year 2011. The most urgent challenge, as Shah noted in his speech, is to maintain what has been achieved in that country as U.S. involvement declines.

While I applaud the international community’s efforts in providing aid and development to Afghanistan and Pakistan, I think a fundamental problem that persists is the belief that foreign aid is a soft foreign policy tool that helps stabilize states, advance U.S. national security interests and “win hearts and minds.”

On the contrary, there is evidence to show that aid money has had de-stabilizing effects. In an ethnically and tribally divided society like Afghanistan, aid can also easily generate jealousy and ill will by inadvertently helping to consolidate the power of some tribes or factions at the expense of others – often pushing rival groups into the arms of the Taliban.

While I think aid should continue to be delivered, we have to divorce ourselves from the notion that we can help re-make societies in our image with aid.

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